Important Update: Flood Insurance Reform
This year’s Hurricane Season caused a very serious concern over flood insurance. Many home owners have learned the hard way that not only is flood insurance an absolute necessity, it’s also not easily accessible. This is where the role of the National Flood Insurance Program (NFIP) has been so vital to American home owners. The program is currently millions of dollars in debt, mainly as a consequence of Hurricane Katrina, and it was due to expire at the end of September. However, on September 8th, the Senate Committee on Banking and Urban Affairs passed a bill to reform the NFIP (Flood Insurance Reform and Modernization Act of 2011).
The National Realtors Association has shown their strong support for the NFIP, with the belief that the program is essential to a “properly functioning real estate market”. NAR President Ron Phipps notes “the NFIP was created because of the lack of available and affordable flood insurance in the private market, which remains true today, and serves as an alternative to expensive taxpayer-funded disaster relief for flood victims. The program writes and renews flood insurance policies for more than 5.6 million home and business owners in 21,000 communities across the country”.
Tom Santos, vice president for Federal Affairs at the American Insurance Association , also urges the importance of the purposed bill stating, “Given the inclement weather and severe flooding throughout the country, it is especially critical that this program be reauthorized and extended so that no home or business is without the ability to receive coverage. With more than 5.6 million policy holders dependent upon the NFIP for their protection against floods, we hope the full Senate will now move to enact these important reforms”.
Although a full resolution has not been reached yet, the reform proposes a 5-year extension of the program’s authority to issue insurance and would also include forgiving its debt.
Courtesy of the NAR and insurance journal.com
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